LBD11064-05-1
S. 7213--A 2
makes reference to a section "of this act", when used in connection with
that particular component, shall be deemed to mean and refer to the
corresponding section of the Part in which it is found. Section three of
this act sets forth the general effective date of this act.
PART A
Section 1. Paragraph 9 of subdivision a of section 26-405 of the
administrative code of the city of New York is REPEALED.
§ 2. Subdivision c of section 26-511 of the administrative code of the
city of New York is amended by adding a new paragraph 15 to read as
follows:
(15) WHERE AN OWNER COMBINES TWO OR MORE VACANT APARTMENTS FORMERLY
SUBJECT TO THIS SECTION, THE LEGAL REGULATED RENT FOR THE COMBINED UNIT
MAY NOT EXCEED THE SUM OF THE RENTS OF THE FORMERLY SEPARATE UNITS.
WHERE AN OWNER REDUCES THE DIMENSIONS OF A RENT STABILIZED UNIT, OR
COMBINES PART OF THAT UNIT WITH A NEIGHBORING UNIT, THE LEGAL REGULATED
RENT FOR THE REDUCED UNIT SHALL BE THE PRIOR RENT, REDUCED IN PROPORTION
TO THE REDUCTION IN FLOOR AREA; THE RENT FOR ANY EXPANDED NEIGHBORING
UNIT MAY NOT EXCEED THE FORMER RENT FOR THAT UNIT.
§ 3. The opening paragraph of paragraph (a) of subdivision 4 of
section 14 of the public housing law, as added by chapter 116 of the
laws of 1997, is amended to read as follows:
that unless otherwise prohibited by occupancy restrictions based upon
income limitations pursuant to federal, state or local law, regulations
or other requirements of governmental agencies, any member of the
tenant's family, as defined in paragraph (c) of this subdivision, shall
succeed to the rights of a tenant under such acts and laws where the
tenant has permanently vacated the housing accommodation and such family
member has resided with the tenant in the housing accommodation as a
primary residence for a period of no less than two years, or where such
person is a "senior citizen" or a "disabled person," as defined in para-
graph (c) of this subdivision, for a period of no less than one year,
immediately prior to the permanent vacating of the housing accommodation
by the tenant, or from the inception of the tenancy or commencement of
the relationship, if for less than such periods. FOR THE PURPOSES OF
THIS PARAGRAPH, "PERMANENTLY VACATED" SHALL MEAN THE DATE WHEN THE
TENANT OF RECORD PHYSICALLY MOVES OUT OF THE HOUSING ACCOMMODATION AND
PERMANENTLY CEASES TO USE IT AS THEIR PRIMARY RESIDENCE, REGARDLESS OF
SUBSEQUENT CONTACTS WITH THE UNIT OR THE SIGNING OF LEASE RENEWALS OR
CONTINUATION OF RENT PAYMENTS. The minimum periods of required residency
set forth in this subdivision shall not be deemed to be interrupted by
any period during which the "family member" temporarily relocates
because he or she:
§ 4. Paragraph 5 of subdivision a of section 5 of section 4 of chapter
576 of the laws of 1974 constituting the emergency tenant protection act
of nineteen seventy-four, is amended to read as follows:
(5) housing accommodations in buildings completed or buildings
substantially rehabilitated as family units on or after January first,
nineteen hundred seventy-four; PROVIDED THAT AN OWNER CLAIMING EXEMPTION
FROM RENT STABILIZATION ON THE BASIS OF SUBSTANTIAL REHABILITATION SHALL
SEEK APPROVAL FROM STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL WITH-
IN ONE YEAR OF THE COMPLETION OF THE SUBSTANTIAL REHABILITATION, OR FOR
ANY BUILDING PREVIOUSLY ALLEGED TO HAVE BEEN SUBSTANTIALLY REHABILITATED
BEFORE THE EFFECTIVE DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND
TWENTY-ONE THAT AMENDED THIS PARAGRAPH, WITHIN SIX MONTHS OF SUCH EFFEC-
S. 7213--A 3
TIVE DATE, AND ULTIMATELY OBTAIN SUCH APPROVAL, WHICH SHALL BE DENIED ON
THE FOLLOWING GROUNDS:
(A) THE OWNER OR ITS PREDECESSORS IN INTEREST HAVE ENGAGED IN HARASS-
MENT OF TENANTS IN THE FIVE YEARS PRECEDING THE COMPLETION OF THE
SUBSTANTIAL REHABILITATION;
(B) THE BUILDING WAS NOT IN A SERIOUSLY DETERIORATED CONDITION REQUIR-
ING SUBSTANTIAL REHABILITATION;
(C) THE OWNER'S OR ITS PREDECESSORS IN INTEREST'S ACTS OR OMISSIONS IN
FAILING TO MAINTAIN THE BUILDING MATERIALLY CONTRIBUTED TO THE SERIOUSLY
DETERIORATED CONDITION OF THE PREMISES; OR
(D) THE SUBSTANTIAL REHABILITATION WORK WAS PERFORMED IN A PIECEMEAL
FASHION AND WAS NOT COMPLETED IN A REASONABLE AMOUNT OF TIME, DURING
WHICH PERIOD THE BUILDING WAS AT LEAST EIGHTY PERCENT VACANT;
§ 5. This act shall take effect immediately and shall apply to all
pending proceedings on and after such date; provided that the amendments
to section 26-511 of chapter 4 of title 26 of the administrative code of
the city of New York made by section two of this act shall expire on the
same date as such law expires and shall not affect the expiration of
such law as provided under section 26-520 of such law.
PART B
Section 1. Subparagraph (g) of paragraph 1 of subdivision g of section
26-405 of the administrative code of the city of New York, as amended by
section 27 of part Q of chapter 39 of the laws of 2019, is amended to
read as follows:
(g) There has been since July first, nineteen hundred seventy, a major
capital improvement essential for the preservation energy efficiency,
functionality, or infrastructure of the entire building, improvement of
the structure including heating, windows, plumbing and roofing but shall
not be for operational costs or unnecessary cosmetic improvements. The
temporary increase based upon a major capital improvement under this
subparagraph for any order of the commissioner issued after the effec-
tive date of the chapter of the laws of two thousand nineteen that
amended this subparagraph shall be in an amount sufficient to amortize
the cost of the improvements pursuant to this subparagraph (g) over a
twelve-year period for buildings with thirty-five or fewer units or a
twelve and one-half year period for buildings with more than thirty-five
units, and shall be removed from the legal regulated rent thirty years
from the date the increase became effective inclusive of any increases
granted by the applicable rent guidelines board. Temporary major capital
improvement increases shall be collectible prospectively on the first
day of the first month beginning sixty days from the date of mailing
notice of approval to the tenant. Such notice shall disclose the total
monthly increase in rent and the first month in which the tenant would
be required to pay the temporary increase. An approval for a temporary
major capital improvement increase shall not include retroactive
payments. The collection of any increase shall not exceed two percent in
any year from the effective date of the order granting the increase over
the rent set forth in the schedule of gross rents, with collectability
of any dollar excess above said sum to be spread forward in similar
increments and added to the rent as established or set in future years.
Upon vacancy, the landlord may add any remaining balance of the tempo-
rary major capital improvement increase to the legal regulated rent.
Notwithstanding any other provision of the law, for any renewal lease
commencing on or after June 14, 2019, the collection of any rent
S. 7213--A 4
increases due to any major capital improvements approved on or after
June 16, 2012 and before June 16, 2019 shall not exceed two percent in
any year for any tenant in occupancy on the date the major capital
improvement was approved[,]; PROVIDED, HOWEVER, NO APPLICATION FOR A
MAJOR CAPITAL IMPROVEMENT RENT INCREASE SHALL BE APPROVED BY THE DIVI-
SION OF HOUSING AND COMMUNITY RENEWAL UNLESS THE OWNER OF THE PROPERTY
HAS FILED ALL COPIES OF PERMITS PERTAINING TO THE MAJOR CAPITAL IMPROVE-
MENT WORK WITH SUCH APPLICATION. ANY APPLICATION SUBMITTED WITH FRAUDU-
LENT PERMITS OR WITHOUT REQUIRED PERMITS SHALL BE DENIED; or
§ 2. Paragraph 6 of subdivision c of section 26-511 of the administra-
tive code of the city of New York, as separately amended by section 12
of part K of chapter 36 and section 28 of part Q of chapter 39 of the
laws of 2019, is amended to read as follows:
(6) provides criteria whereby the commissioner may act upon applica-
tions by owners for increases in excess of the level of fair rent
increase established under this law provided, however, that such crite-
ria shall provide (a) as to hardship applications, for a finding that
the level of fair rent increase is not sufficient to enable the owner to
maintain approximately the same average annual net income (which shall
be computed without regard to debt service, financing costs or manage-
ment fees) for the three year period ending on or within six months of
the date of an application pursuant to such criteria as compared with
annual net income, which prevailed on the average over the period nine-
teen hundred sixty-eight through nineteen hundred seventy, or for the
first three years of operation if the building was completed since nine-
teen hundred sixty-eight or for the first three fiscal years after a
transfer of title to a new owner provided the new owner can establish to
the satisfaction of the commissioner that he or she acquired title to
the building as a result of a bona fide sale of the entire building and
that the new owner is unable to obtain requisite records for the fiscal
years nineteen hundred sixty-eight through nineteen hundred seventy
despite diligent efforts to obtain same from predecessors in title and
further provided that the new owner can provide financial data covering
a minimum of six years under his or her continuous and uninterrupted
operation of the building to meet the three year to three year compar-
ative test periods herein provided; and (b) as to completed building-
wide major capital improvements, for a finding that such improvements
are deemed depreciable under the Internal Revenue Code and that the cost
is to be amortized over a twelve-year period for a building with thir-
ty-five or fewer housing accommodations, or a twelve and one-half-year
period for a building with more than thirty-five housing accommodations,
for any determination issued by the division of housing and community
renewal after the effective date of the [the] chapter of the laws of two
thousand nineteen that amended this paragraph and shall be removed from
the legal regulated rent thirty years from the date the increase became
effective inclusive of any increases granted by the applicable rent
guidelines board. Temporary major capital improvement increases shall be
collectible prospectively on the first day of the first month beginning
sixty days from the date of mailing notice of approval to the tenant.
Such notice shall disclose the total monthly increase in rent and the
first month in which the tenant would be required to pay the temporary
increase. An approval for a temporary major capital improvement increase
shall not include retroactive payments. The collection of any increase
shall not exceed two percent in any year from the effective date of the
order granting the increase over the rent set forth in the schedule of
gross rents, with collectability of any dollar excess above said sum to
S. 7213--A 5
be spread forward in similar increments and added to the rent as estab-
lished or set in future years. Upon vacancy, the landlord may add any
remaining balance of the temporary major capital improvement increase to
the legal regulated rent. Notwithstanding any other provision of the
law, for any renewal lease commencing on or after June 14, 2019, the
collection of any rent increases due to any major capital improvements
approved on or after June 16, 2012 and before June 16, 2019 shall not
exceed two percent in any year for any tenant in occupancy on the date
the major capital improvement was approved or based upon cash purchase
price exclusive of interest or service charges. Where an application for
a temporary major capital improvement increase has been filed, a tenant
shall have sixty days from the date of mailing of a notice of a proceed-
ing in which to answer or reply. The state division of housing and
community renewal shall provide any responding tenant with the reasons
for the division's approval or denial of such application. THE DIVISION
OF HOUSING AND COMMUNITY RENEWAL SHALL REQUIRE THE SUBMISSION OF COPIES
OF ALL PERMITS PERTAINING TO MAJOR CAPITAL IMPROVEMENT WORK WITH ANY
APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE. ANY APPLICA-
TION SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS SHALL
BE DENIED. Notwithstanding anything to the contrary contained herein, no
hardship increase granted pursuant to this paragraph shall, when added
to the annual gross rents, as determined by the commissioner, exceed the
sum of, (i) the annual operating expenses, (ii) an allowance for manage-
ment services as determined by the commissioner, (iii) actual annual
mortgage debt service (interest and amortization) on its indebtedness to
a lending institution, an insurance company, a retirement fund or
welfare fund which is operated under the supervision of the banking or
insurance laws of the state of New York or the United States, and (iv)
eight and one-half percent of that portion of the fair market value of
the property which exceeds the unpaid principal amount of the mortgage
indebtedness referred to in subparagraph (iii) of this paragraph. Fair
market value for the purposes of this paragraph shall be six times the
annual gross rent. The collection of any increase in the stabilized rent
for any apartment pursuant to this paragraph shall not exceed six
percent in any year from the effective date of the order granting the
increase over the rent set forth in the schedule of gross rents, with
collectability of any dollar excess above said sum to be spread forward
in similar increments and added to the stabilized rent as established or
set in future years;
§ 3. Paragraph 3 of subdivision d of section 6 of section 4 of chapter
576 of the laws of 1974, constituting the emergency tenant protection
act of nineteen seventy-four, as amended by section 26 of part Q of
chapter 39 of the laws of 2019, is amended to read as follows:
(3) there has been since January first, nineteen hundred seventy-four
a major capital improvement essential for the preservation, energy effi-
ciency, functionality, or infrastructure of the entire building,
improvement of the structure including heating, windows, plumbing and
roofing, but shall not be for operation costs or unnecessary cosmetic
improvements. An adjustment under this paragraph shall be in an amount
sufficient to amortize the cost of the improvements pursuant to this
paragraph over a twelve-year period for a building with thirty-five or
fewer housing accommodations, or a twelve and one-half period for a
building with more than thirty-five housing accommodations and shall be
removed from the legal regulated rent thirty years from the date the
increase became effective inclusive of any increases granted by the
applicable rent guidelines board, for any determination issued by the
S. 7213--A 6
division of housing and community renewal after the effective date of
the chapter of the laws of two thousand nineteen that amended this para-
graph. Temporary major capital improvement increases shall be collecta-
ble prospectively on the first day of the first month beginning sixty
days from the date of mailing notice of approval to the tenant. Such
notice shall disclose the total monthly increase in rent and the first
month in which the tenant would be required to pay the temporary
increase. An approval for a temporary major capital improvement increase
shall not include retroactive payments. The collection of any increase
shall not exceed two percent in any year from the effective date of the
order granting the increase over the rent set forth in the schedule of
gross rents, with collectability of any dollar excess above said sum to
be spread forward in similar increments and added to the rent as estab-
lished or set in future years. Upon vacancy, the landlord may add any
remaining balance of the temporary major capital improvement increase to
the legal regulated rent. Notwithstanding any other provision of the
law, the collection of any rent increases for any renewal lease commenc-
ing on or after June 14, 2019, due to any major capital improvements
approved on or after June 16, 2012 and before June 16, 2019 shall not
exceed two percent in any year for any tenant in occupancy on the date
the major capital improvement was approved[,]; PROVIDED, HOWEVER, NO
APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE SHALL BE
APPROVED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL UNLESS THE
OWNER OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS PERTAINING TO THE
MAJOR CAPITAL IMPROVEMENT WORK WITH SUCH APPLICATION. ANY APPLICATION
SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED PERMITS SHALL BE
DENIED; or
§ 4. Subparagraph 7 of the second undesignated paragraph of paragraph
(a) of subdivision 4 of section 4 of chapter 274 of the laws of 1946,
constituting the emergency housing rent control law, as separately
amended by section 25 of part Q of chapter 39 and section 14 of part K
of chapter 36 of the laws of 2019, is amended to read as follows:
(7) there has been since March first, nineteen hundred fifty, a major
capital improvement essential for the preservation, energy efficiency,
functionality, or infrastructure of the entire building, improvement of
the structure including heating, windows, plumbing and roofing, but
shall not be for operational costs or unnecessary cosmetic improvements;
which for any order of the commissioner issued after the effective date
of the chapter of the laws of two thousand nineteen that amended this
paragraph the cost of such improvement shall be amortized over a twelve-
year period for buildings with thirty-five or fewer units or a twelve
and one-half year period for buildings with more than thirty-five units,
and shall be removed from the legal regulated rent thirty years from the
date the increase became effective inclusive of any increases granted by
the applicable rent guidelines board. Temporary major capital improve-
ment increases shall be collectible prospectively on the first day of
the first month beginning sixty days from the date of mailing notice of
approval to the tenant. Such notice shall disclose the total monthly
increase in rent and the first month in which the tenant would be
required to pay the temporary increase. An approval for a temporary
major capital improvement increase shall not include retroactive
payments. The collection of any increase shall not exceed two percent in
any year from the effective date of the order granting the increase over
the rent set forth in the schedule of gross rents, with collectability
of any dollar excess above said sum to be spread forward in similar
increments and added to the rent as established or set in future years.
S. 7213--A 7
Upon vacancy, the landlord may add any remaining balance of the tempo-
rary major capital improvement increase to the legal regulated rent.
Notwithstanding any other provision of the law, for any renewal lease
commencing on or after June 14, 2019, the collection of any rent
increases due to any major capital improvements approved on or after
June 16, 2012 and before June 16, 2019 shall not exceed two percent in
any year for any tenant in occupancy on the date the major capital
improvement was approved; provided, however, where an application for a
temporary major capital improvement increase has been filed, a tenant
shall have sixty days from the date of mailing of a notice of a proceed-
ing in which to answer or reply. The state division of housing and
community renewal shall provide any responding tenant with the reasons
for the division's approval or denial of such application; PROVIDED,
HOWEVER, NO APPLICATION FOR A MAJOR CAPITAL IMPROVEMENT RENT INCREASE
SHALL BE APPROVED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL
UNLESS THE OWNER OF THE PROPERTY HAS FILED ALL COPIES OF PERMITS
PERTAINING TO THE MAJOR CAPITAL IMPROVEMENT WORK WITH SUCH APPLICATION.
ANY APPLICATION SUBMITTED WITH FRAUDULENT PERMITS OR WITHOUT REQUIRED
PERMITS SHALL BE DENIED; or
§ 5. This act shall take effect immediately; provided that the amend-
ments to section 26-405 of the city rent and rehabilitation law made by
section one of this act shall remain in full force and effect only as
long as the public emergency requiring the regulation and control of
residential rents and evictions continues, as provided in subdivision 3
of section 1 of the local emergency housing rent control act; provided,
further, that the amendments to section 26-511 of the rent stabilization
law of nineteen hundred sixty-nine made by section two of this act shall
expire on the same date as such law expires and shall not affect the
expiration of such law as provided under section 26-520 of such law, as
from time to time amended.
PART C
Section 1. Subdivision 3 of section 302-a of the multiple dwelling
law, as added by chapter 911 of the laws of 1965, is amended to read as
follows:
3. a. If (i) the official records of the department shall note that a
rent impairing violation exists OR EXISTED in respect to a multiple
dwelling and that notice of such violation has been given by the depart-
ment, by mail, to the owner last registered with the department and (ii)
such note of the violation [is] WAS not cancelled or removed of record
within [six] THREE months after the date of such notice of such
violation, then for the period that such violation remains uncorrected
after the expiration of said [six] THREE months, no rent shall be recov-
ered by any owner for any premises in such multiple dwelling used by a
resident thereof for human habitation in which the condition constitut-
ing such rent impairing violation exists, provided, however, that if the
violation is one that requires approval of plans by the department for
the corrective work and if plans for such corrective work shall have
been duly filed within [three months] ONE MONTH from the date of notice
of such violation by the department to the owner last registered with
the department, the [six-months] THREE MONTH period aforementioned shall
not begin to run until the date that plans for the corrective work are
approved by the department; if plans are not filed within said [three-
months] ONE MONTH period or if so filed, they are disapproved and amend-
ments are not duly filed within thirty days after the date of notifica-
S. 7213--A 8
tion of the disapproval by the department to the person having filed the
plans, the [six-months] THREE MONTH period shall be computed as if no
plans whatever had been filed under this proviso. If a condition consti-
tuting a rent impairing violation exists in the part of a multiple
dwelling used in common by the residents or in the part under the
control of the owner thereof, the violation shall be deemed to exist in
the respective premises of each resident of the multiple dwelling.
b. The provisions of subparagraph a shall not apply if (i) the condi-
tion referred to in the department's notice to the owner last registered
with the department did not in fact exist, notwithstanding the notation
thereof in the records of the department; (ii) the condition which is
the subject of the violation has in fact been corrected WITHIN THE THREE
MONTH PERIOD REQUIRED BY SUBPARAGRAPH A OF THIS SUBDIVISION, though the
note thereof in the department has not been removed or cancelled; (iii)
the violation has been caused by the resident from whom rent is sought
to be collected or by members of his family or by his guests or by
another resident of the multiple dwelling or the members of the family
of such other resident or by his guests, or (iv) the resident proceeded
against for rent has refused entry to the owner for the purpose of
correcting the condition giving rise to the violation.
c. To raise a defense under subparagraph a in any action to recover
rent or in any special proceeding for the recovery of possession because
of non-payment of rent, the resident must affirmatively plead and prove
the material facts under subparagraph a[, and must also deposit with the
clerk of the court in which the action or proceeding is pending at the
time of filing of the resident's answer the amount of rent sought to be
recovered in the action or upon which the proceeding to recover
possession is based, to be held by the clerk of the court until final
disposition of the action or proceeding at which time the rent deposited
shall be paid to the owner, if the owner prevails, or be returned to the
resident if the resident prevails. Such deposit of rent shall vitiate
any right on the part of the owner to terminate the lease or rental
agreement of the resident because of nonpayment of rent].
d. If a resident voluntarily pays rent or an installment of rent when
he OR SHE would be privileged to withhold the same under subparagraph a,
he OR SHE shall [not thereafter] have [any] A claim or cause of action
to recover back the rent or installment of rent so paid. A voluntary
payment within the meaning hereof shall mean payment other than one made
pursuant to a judgment in an action or special proceeding.
e. [If upon the trial of any action to recover rent or any special
proceeding for the recovery of possession because of non-payment of rent
it shall appear that the resident has raised a defense under this
section in bad faith, or has caused the violation or has refused entry
to the owner for the purpose of correcting the condition giving rise to
the violation, the court, in its discretion, may impose upon the resi-
dent the reasonable costs of the owner, including counsel fees, in main-
taining the action or proceeding not to exceed one hundred dollars.] THE
DEPARTMENT SHALL NOTIFY THE RESIDENT AND OWNER WHEN A RENT IMPAIRING
VIOLATION HAS BEEN PLACED IN THEIR APARTMENT. THE NOTIFICATION SHALL
INCLUDE A LIST OF THE RENT IMPAIRING VIOLATIONS PLACED AND AN EXPLANA-
TION OF THE RESIDENT'S RIGHT TO RAISE THE RENT IMPAIRING VIOLATIONS AS A
DEFENSE IN ANY ACTION TO RECOVER RENT OR IN ANY SPECIAL PROCEEDING FOR
THE RECOVERY OF POSSESSION BECAUSE OF NON-PAYMENT OF RENT.
§ 2. Subdivisions 10 and 11 of section 713 of the real property
actions and proceedings law, subdivision 10 as amended by chapter 467 of
S. 7213--A 9
the laws of 1981 and subdivision 11 as added by chapter 312 of the laws
of 1962, are amended to read as follows:
10. The person in possession has entered the property or remains in
possession by force or unlawful means and he or SHE OR his OR HER prede-
cessor in interest was not in quiet possession for three years before
the time of the forcible or unlawful entry or detainer and the petition-
er was peaceably in actual possession at the time of the forcible or
unlawful entry or in constructive possession at the time of the forcible
or unlawful detainer. ANY LAWFUL OCCUPANT, PHYSICALLY OR CONSTRUCTIVELY
IN POSSESSION, WHO HAS BEEN EVICTED OR DISPOSSESSED WITHOUT THE COURT
PROCESS MANDATED BY SECTION SEVEN HUNDRED ELEVEN OF THIS ARTICLE, MAY
COMMENCE A PROCEEDING UNDER THIS SUBDIVISION TO BE RESTORED TO
POSSESSION, AND SHALL BE SO RESTORED UPON PROOF THAT THEIR EVICTION WAS
UNLAWFUL; no notice to quit shall be required in order to maintain a
proceeding under this subdivision.
11. The person in possession entered into possession as an incident to
employment by petitioner, and the time agreed upon for such possession
has expired or, if no such time was agreed upon, the employment has been
terminated[; no notice to quit shall be required in order to maintain
the proceeding under this subdivision].
§ 3. Subdivisions 2 and 3 of section 732 of the real property actions
and proceedings law, as amended by section 14 of part M of chapter 36 of
the laws of 2019, are amended to read as follows:
2. If the respondent answers, the clerk shall fix a date for trial or
hearing not less than three nor more than eight days after joinder of
issue, and shall immediately notify by mail the parties or their attor-
neys of such date. If the determination be for the petitioner, the issu-
ance of a warrant shall not be stayed for more than five days from such
determination, except as provided in section seven hundred fifty-three
of this article. IF THE RESPONDENT FAILS TO APPEAR ON SUCH DATE, THE
COURT, AFTER MAKING AN ASSESSMENT, PURSUANT TO SECTION THREE THOUSAND
TWO HUNDRED FIFTEEN OF THE CIVIL PRACTICE LAW AND RULES, MAY ISSUE A
JUDGMENT IN FAVOR OF THE PETITIONER AND THE ISSUANCE OF THE WARRANT
SHALL BE STAYED FOR A PERIOD NOT TO EXCEED TEN DAYS FROM THE DATE OF
SERVICE, EXCEPT AS PROVIDED IN SECTION SEVEN HUNDRED FIFTY-THREE OF THIS
ARTICLE.
3. If the respondent fails to answer within ten days from the date of
service, as shown by the affidavit or certificate of service of the
notice of petition and petition, [the judge shall render judgment in
favor of the petitioner and] THE PETITIONER MAY MAKE AN APPLICATION FOR
A DEFAULT JUDGMENT. UPON THIS APPLICATION, THE CLERK SHALL FIX A DATE
FOR INQUEST AND IMMEDIATELY NOTIFY BY MAIL THE PARTIES OR THEIR ATTOR-
NEYS OF SUCH DATE. IF THE RESPONDENT FAILS TO APPEAR ON SUCH DATE, THE
COURT, AFTER MAKING AN ASSESSMENT, PURSUANT TO SECTION THREE THOUSAND
TWO HUNDRED FIFTEEN OF THE CIVIL PRACTICE LAW AND RULES, MAY ISSUE A
JUDGMENT IN FAVOR OF THE PETITIONER AND may stay the issuance of the
warrant for a period of not to exceed ten days from the date of service,
except as provided in section seven hundred fifty-three of this article.
§ 4. This act shall take effect immediately and shall apply to all
pending proceedings on and after such date.
Part D
Section 1. Legislative findings. The legislature hereby finds and
declares that:
S. 7213--A 10
(a) the pool of rent regulated apartments in New York state contains
an unacceptably high number of apartments in which the current rents are
based on prior rents that exceeded the legal regulated rent at the time
they were charged, but for which remedies were limited under the law in
effect before the effective date of the Housing Stability and Tenant
Protection Act of 2019 (HSTPA);
(b) it is public policy prospectively to reduce, insofar as possi-
ble, those rents to a level in line with what they would have been in
the absence of the unlawful rent setting and deregulations that were
permitted under prior law to go unremedied, and therefore to impose the
rent calculation standards of the HSTPA prospectively from the date of
its enactment, including in cases where the pre-HSTPA rent has already
been established by a court or administrative agency;
(c) the purpose of the prospective application of the penalty and
record review provisions of the HSTPA is to prevent the perpetual
collection of unlawful and inflated rents, and to encourage the volun-
tary registration of any rent stabilized apartment for which any prior
annual registration statement has not been filed, and to encourage the
voluntary recalculation of unreliable pre-HSTPA rents;
(d) in light of court decisions arising under the HSTPA, including
REGINA METRO V. DHCR, it is public policy that the legislature define
clearly the prospective reach of that law, and limit, to the extent
required by the constitution, the retroactive reach of that law;
(e) despite REGINA, the scope of the fraud exception to the pre-HSTPA
four-year rule for calculating rents remains unsettled and the subject
of litigation, and it is therefore public policy that the legislature
codify, without expanding or reducing the liability of landlords under
pre-HSTPA law, the standard for applying that exception;
(f) the New York state division of housing and community renewal
(DHCR) misinterpreted the rent stabilization law for a significant peri-
od of time with respect to the regulatory obligations arising from the
receipt of J-51 and 421-a tax benefits resulting in the unlawful deregu-
lation of tens of thousands of rent-stabilized apartments, the setting
of unlawful rents, and the collection of millions of dollars of rent
overcharges, during a housing emergency. Both landlords and tenants
relied upon the DHCR's misinterpretation of the law. In REGINA, the
Court of Appeals settled many of the issues arising from overcharge
claims by tenants who were misled into refraining from filing overcharge
cases during the period when DHCR's erroneous interpretation of the law
was in effect, but left open the issue of whether a landlord's ongoing
collection of overcharges and failure to return apartments to rent-sta-
bilization, after the law was clarified, should be treated as fraud;
(g) the integrity of the registration system for rent regulated hous-
ing has been eroded by the use of base date rents, rather than the
service and filing of reliable registration statements, to set rents
under the law in effect between the enactment of the Rent Regulation
Reform Act of 1997 and the HSTPA. It is therefore public policy to
impose, prospectively from the date of the enactment of the HSTPA, a
rent calculation formula that, insofar as possible, derives the legal
regulated rents for apartments from reliable registration statements
served upon tenants and made available to the public; and
(h) because pre-HSTPA law with respect to the maintenance by landlords
of rent records was complex, and has an ongoing impact upon the calcu-
lation of post-HSTPA rents, it is necessary to codify the pre-HSTPA law
that applied to the destruction of rent records prior to the enactment
S. 7213--A 11
of the HSTPA, and to define clearly the impact of such law upon the
prospective calculation of rents under the HSTPA.
§ 2. (a) The legal rent for all rent stabilized apartments for the
period from July 1, 2019 and thereafter shall be determined in accord-
ance with Part F of the HSTPA. Where the legal regulated rent for a rent
stabilized apartment for the period prior to June 14, 2019 has been
determined by any court or administrative agency, that determination
shall not foreclose a recalculation of the post-HSTPA rent, except that
any pre-HSTPA rent that, as of June 14, 2019, is lower than the rent
that would be permitted to be charged under the HSTPA, shall be deemed
to be the lawful rent under the HSTPA on June 15, 2019, and shall be
used as the basis for calculating subsequent rents under the HSTPA;
(b) Subdivision (a) of this section shall apply to all cases, includ-
ing those pending as of June 14, 2019 before any court, appellate tribu-
nal, or administrative agency in which a claim for rent overcharges or
rent arrears has been asserted with respect to rent stabilized housing,
the legal regulated rent for the period from June 14, 2019 and thereaft-
er shall be determined in accordance with Part F of the HSTPA. The legal
regulated rent for the portion of any overcharge claim involving rents
paid prior to June 14, 2019 shall be determined under pre-HSTPA law,
including the default formula in cases of fraud, as codified herein.
(c) Nothing in this act, or the HSTPA, or prior law, shall be
construed as restricting, impeding or diminishing the use of records of
any age or type, going back to any date that may be relevant, for
purposes of determining the status of any apartment under the rent
stabilization law;
(d) The legal regulated rent payable for the period prior to June 14,
2019 shall be calculated in accordance with the law in effect prior to
the HSTPA, including the prior four-year limitation on the consideration
of rent records, and including the fraud exception to such limitation
and such other exceptions as existed under prior law and under the regu-
lations of the New York state division of housing and community renewal.
Nothing in this act shall be construed as limiting such exceptions or as
limiting the application of any equitable doctrine that extends statutes
of limitations generally. With respect to the calculation of legal rents
for the period prior to June 14, 2019, an owner shall be deemed to have
committed fraud if the owner shall have committed a material breach of
any duty, arising under statutory, administrative or common law, to
disclose truthfully to any tenant, government agency or judicial or
administrative tribunal, the rent, regulatory status, or lease informa-
tion, for purposes of claiming an unlawful rent or claiming to have
deregulated an apartment. The following conduct shall be presumed to
have been the product of such fraud: (1) the unlawful deregulation of
any apartment, including such deregulation as results from claiming an
unlawful increase such as would have brought the rent over the deregu-
lation threshold that existed under prior law, unless the landlord can
prove good faith reliance on a directive or ruling by an administrative
agency or court; or (2) beginning October 1, 2011, failing to register,
as rent stabilized, any apartment in a building receiving J-51 or 421-a
benefits;
(e) In accordance with the practice of the New York state division of
housing and community renewal prior to June 14, 2019, where fraud is not
established, base rents of apartments unlawfully deregulated shall be
calculated as the average of rents for comparable rent stabilized apart-
ments in the building, rather than the default formula applicable to
cases involving fraud;
S. 7213--A 12
(f) For the period prior to June 14, 2019, neither the version of
subdivision g of section 26-516 of the administrative code of the city
of New York then in effect, nor the version of section 2523.7 of the
rent stabilization code (9 NYCRR 2523.7) then in effect shall be
construed as permitting the destruction of rent records for units that
have not been properly and timely registered. Where records have been
permitted to be destroyed by virtue of proper registration, and no other
law required the maintenance of such records, and where the owner has
proven that such records were actually destroyed in accordance with
prior law and that such destruction took place prior to June 15, 2019,
the registration served and filed prior to such lawful destruction of
records shall be presumed to be reliable, for purposes of any post-HSTPA
calculation of the rent, but that presumption shall be rebuttable. The
parties shall be entitled to discovery of any evidence found to be
reasonably necessary to demonstrate the legal rent. Nothing in this
subdivision shall be interpreted as authorizing the destruction of any
record, that under prior law was relevant to establishing (1) the status
of an apartment as regulated or unregulated; (2) the presence or absence
of fraud with respect to renting any housing accommodation; (3) the
presence or absence of willfulness in the collection of overcharges; (4)
the useful life of any item, the replacement of which is claimed by the
owner to qualify an apartment for a rent increase; (5) the duration of
any tenancy, such as would establish whether an owner was entitled under
prior law to a longevity increase; or (6) compliance with any law that,
independently of the rent stabilization law, required or requires the
maintenance of such records. Where the calculation of the rent is
dependent upon records that the owner has improperly destroyed, includ-
ing where the records were destroyed without the apartment having been
registered, the rent shall be calculated in accordance with the default
formula.
§ 3. This act shall take effect immediately.
§ 2. Severability. If any clause, sentence, paragraph, section or part
of this act shall be adjudged by any court of competent jurisdiction to
be invalid and after exhaustion of all further judicial review, the
judgment shall not affect, impair, or invalidate the remainder thereof,
but shall be confined in its operation to the clause, sentence, para-
graph, section or part of this act directly involved in the controversy
in which the judgment shall have been rendered.
§ 3. This act shall take effect immediately provided, however, that
the applicable effective date of Parts A through D of this act shall be
as specifically set forth in the last section of such Parts.
